'Zim's illegal forex dealers hit hard times'

January 1 2009 at 02:55pm

Zimbabwe's illegal foreign currency market has been dealt a blow, the state-controlled Herald reported on Thursday.

"The introduction of the Foreign Exchange Licensed Warehouses and Retail Shops facility authorising businesses to sell goods and services in foreign currency has dealt a near-death blow to the illegal foreign currency market.

"Fewer people are changing their hard currency into Zimbabwe dollars," the newspaper said.

Since almost all goods and services can now be paid for in hard currency, demand for Zimbabwe dollars on the illegal parallel market has fallen drastically, a development that has seen illegal foreign currency dealings almost drying up, the Herald reported.

A survey by The Herald this week revealed a significant drop in demand for the local unit as very few shops and traders were still selling products in Zimbabwe dollars.

Zimbabwe's central bank recently awarded over 1 000 shops and wholesalers countrywide licences to trade in hard currency, but other traders have since followed suit.

Although there was an ongoing police operation targeting illegal foreign currency dealers in and around the central business district, it was mainly the growing dollarisation of the economy that had seen the lucrative money-changing business losing its glitter, the Herald said.

Basic commodities like bread, cooking oil, sugar and maize-meal are mostly available in foreign currency.

Even commuter omnibus operators now accept foreign currency, leaving those with free funds with no choice but to hold on to their hard currency, the Herald said. - Sapa